Sprint, Clearwire in scrap over WiMAX phone royalties

updated 01:45 pm EST, Thu November 11, 2010

by MacNN Staff

Sprint takes arbitration steps against Clearwire

Wireless provider Sprint has taken arbitrary action against Clearwire, of which it's a majority shareholder, over a dispute related to money Sprint pays Clearwire for operating its WiMAX-capable smartphones. This includes the HTC Evo 4G and the Samsung Epic 4G and several hundred thousand owners who use them outside of Clearwire's 4G coverage area. Clearwire believes Sprint needs to make monthly payments for these handsets despite this under their wholesale agreement, with Sprint disagreeing.

The argument comes at low point for Clearwire, as it's facing a shortage of funds. It could lose out on millions of dollars in revenue every month and has warned that it may shut down as soon as mid-2011 if it doesn't get additional funding.

In its latest quarterly filing with the Securities and Exchange Commission, Clearwire said an unsatisfactory resolution to the arbitration could result in a revision of its business plans and projections and adversely affect the result of its operations.

Sprint now charges Epic and Evo 4G owners a $10 per month premium for access to the Clearwire WiMAX network, whether or not they live in a WiMAX market.

"We do have an agreement between the parties," said Clearwire's Chief Commercial Officer Mike Sievert. "What we have right now is a difference in interpretation of it." [viaFierceWireless]

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